Correlation Between Guardant Health and Agilent Technologies

Can any of the company-specific risk be diversified away by investing in both Guardant Health and Agilent Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Guardant Health and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guardant Health and Agilent Technologies, you can compare the effects of market volatilities on Guardant Health and Agilent Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Guardant Health with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and Agilent Technologies.

Diversification Opportunities for Guardant Health and Agilent Technologies

0.65

Correlation Coefficient

Guardant Health  Agilent Technologies

Poor diversification

The 3 months correlation between Guardant and Agilent is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Guardant Health is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Guardant Health are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Guardant Health i.e., Guardant Health and Agilent Technologies go up and down completely randomly.

Pair Corralation between Guardant Health and Agilent Technologies

Allowing for the 90-day total investment horizon Guardant Health is expected to generate 1.98 times more return on investment than Agilent Technologies. However, Guardant Health is 1.98 times more volatile than Agilent Technologies. It trades about 0.19 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.06 per unit of risk. If you would invest  4,024  in Guardant Health on May 19, 2025 and sell it today you would earn a total of  1,864  from holding Guardant Health or generate 46.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Guardant Health  vs.  Agilent Technologies

Guardant Health

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardant Health are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Guardant Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Agilent Technologies

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Agilent Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guardant Health and Agilent Technologies

The main advantage of trading using opposite Guardant Health and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health position performs unexpectedly, Agilent Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.

The idea behind Guardant Health and Agilent Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.